COURT FILE NO.: CV-18-0152-00 DATE: 2023-06-16
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
Canadian Lakehead Exhibition Plaintiff
R. Johansen, for the Plaintiff
- and -
1723022 Ontario Ltd. General Partner of The Sportsdome Limited Partnership, Lloyd's of London, The Wawanesa Mutual Life Insurance Co., Canada Brokerlink (Ontario) Inc., Philpot & Delgaty Limited and Aviva Insurance Company of Canada/Aviva Defendants
Robert Zanette, President of 1723022 Ontario Ltd., representing himself and the Corporation
HEARD: June 13, 2023, at Thunder Bay, Ontario
Mr. Justice W. D. Newton
Decision On Motion
Overview
[1] The plaintiff, Canadian Lakehead Exhibition (‘CLE”) seeks an Order that the Defendant, 1723022 Ontario Ltd. General Partner of the Sportsdome Limited Partnership (“Sportsdome”) and its president, Robert Zanette, are in contempt with respect to an Order made by me on January 20, 2022.
The Facts - History of Proceedings to Date
[2] CLE secured Judgment against the Sportsdome on April 26, 2021, and May 31, 2021 in relation to costs, in the aggregate amount of $113,588.08.
[3] In an attempt to enforce the judgment, CLE sought an examination of execution. Encountering resistance in those efforts, CLE brought a motion seeking an order for production of certain documents and an order that a representative of Sportsdome attend an examination in aid of execution.
[4] Sportsdome was represented by counsel. On January 20, 2022, I ordered production of the following documents within 30 days:
a) General ledger of 1723022 Ontario Ltd. from November 18, 2016 to date. b) Bank records of 1723022 Ontario Ltd. from November 18, 2016, to date; c) Cancelled cheques of 1723022 Ontario Ltd. from November 18, 2016 to date; d) All proofs of loss filed with any insurer respecting dome collapse of November 18, 2016; e) All settlement documents with insurers respecting dome collapse including details of payments, basis for payments by reference to insurance amounts paid (ic. Equipment, debris removal, business interruption); f) Financial statements and tax returns for 1723022 Ontario Ltd. for fiscal years ending in 2016 through to 2021; g) Details on any amount paid by 1723022 Ontario Ltd. to any shareholder, director or officer of 1723022 Ontario Ltd. from November 18,2016, to date.
[5] I also ordered that a representative of Sportsdome attend an examination in aid of execution within 60 days and ordered that Sportsdome pay CLE’s costs in the amount of $1,000.
[6] On March 17, 2020, counsel for Sportsdome sought and was granted an order removing them as counsel for Sportsdome.
[7] On March 24, 2022, CLE brought a motion seeking a declaration that Sportsdome and Mr. Zanette were in contempt of the January 20, 2022 order. I reproduce my endorsement made that day:
R. Johansen for CLE, no one appearing for Robert Zanette or 1723022 although served March 24, personally.
2022 This is a motion seeking a declaration that Mr. Zanette and the corporation are in contempt with respect an order of this court dated January 20, 2022. CLE has a judgment against the corporation and certain documents were ordered produced in advance of an examination in aid of execution and an order was made for the examination in aid of execution to proceed within 60 days. It is alleged that the corporation is in default of that order.
Mr. Zanette and the corporation were previously represented by counsel who have now been removed as counsel of record by order of this court.
Mr. Zanette had advised Mr. Johansen that he is seeking new counsel, but despite waiting 15 minutes as required by Rule 3.03(2), neither Mr. Zanette nor counsel appeared on this motion.
Accordingly, I have adjourned this motion to April 7, 2022.
So that Mr. Zanette and the corporation and its officers and directors understand the jeopardy facing them, I set out the following subsections of Rule 60.11 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 outlining the powers of this court on a motion for contempt:
Warrant for Arrest
(4) A judge may issue a warrant (Form 60K) for the arrest of the person against whom a contempt order is sought where the judge is of the opinion that the person's attendance at the hearing is necessary in the interest of justice and it appears that the person is not likely to attend voluntarily. R.R.O. 1990, Reg. 194, r. 60.11 (4) .
Content of Order
(5) In disposing of a motion under subrule (1), the judge may make such order as is just, and where a finding of contempt is made, the judge may order that the person in contempt,
(a) be imprisoned for such period and on such terms as are just; (b) be imprisoned if the person fails to comply with a term of the order; (c) pay a fine; (d) do or refrain from doing an act; (e) pay such costs as are just; and (f) comply with any other order that the judge considers necessary, and may grant leave to issue a writ of sequestration under rule 60.09 against the person's property. R.R.O. 1990, Reg. 194, r. 60.11 (5) .
Where Corporation is in Contempt
(6) Where a corporation is in contempt, the judge may also make an order under subrule (5) against any officer or director of the corporation and may grant leave to Issue a writ of sequestration under rule 60.09 against his or her property. R.R.O. 1990, Reg. 194, r. 60.11 (6) .
Warrant of Committal
(7) An order under subrule (5) for imprisonment may be enforced by the issue of a warrant of committal (Form 60L). R.R.O. 1990, Reg. 194, r. 60.11 (7) ,
I direct that counsel for the CLE provide a copy of this endorsement by email to Mr. Zanette and the corporation.
[8] On April 7, 2022, Mr. Zanette appeared and indicated he would not be retaining counsel. The motion was adjourned again to May 26, 2022.
[9] The motion was adjourned again to June 23, 2022 and again to July 14, 2022.
[10] On September 8, 2022 the parties were directed to obtain a date for a one half day contempt motion.
[11] The next appearance was on January 6, 2023, and the endorsement was:
[1] This is a contempt motion brought by the plaintiff against the defendants alleging that the defendant, 1723022 Ontario Ltd. is in contempt of the January 20, 2022, Order of Newton J.
[2] Mr. Johansen advises that Mr. Zanette has requested an adjournment of approximately one month in order to purge his alleged contempt. Mr. Johansen consents to this request.
[3] The plaintiff's contempt motion is adjourned on consent to March 2, 2023 at 10:00 am, peremptory on the defendants on that date, one hour required.
[12] The motion was finally argued before me on June 13, 2023.
[13] Mr. Zanette appeared, unrepresented, and did not file any material in response to CLE’s motion for contempt. Instead, he made representations outlining some of his steps to comply with the production order.
[14] The end result of the representation is that it is admitted that:
- Cancelled cheques of Sportsdome from November 18, 2016 to date have not been produced although Mr. Zanette said that he delivered those documents last week. He will resend.
- All settlement documents with insurers respecting dome collapse including details of payments, basis for payments by reference to insurance amounts paid (ie. Equipment, debris removal, business interruption) have not been produced. Documentation has been produced but not all.
- Details on any amount paid by Sportsdome to any Shareholder/Director/Officer of Sportsdome from November 18, 2016 to date have not been produced.
[15] As counsel for CLE notes, the bank records produced show substantial deposits often over $100,000 and substantial withdrawals most of which were to unknown recipients.
The Law
[16] In Greenberg v. Nowack, 2016 ONCA 949, the Ontario Court of Appeal stated:
[25] The test for civil contempt was articulated by the Supreme Court in Carey v. Laiken, 2015 SCC 17, [2015] 2 S.C.R. 79, at paras. 33-35:
- The order alleged to have been breached must state clearly and unequivocally what should and should not be done;
- The party alleged to have breached the order must have had actual knowledge of it; and
- The party allegedly in breach must have intentionally done the act that the order prohibits or intentionally failed to do the act the order compels.
[26] Each element of civil contempt must be proven beyond a reasonable doubt: Carey v. Laiken, at para. 32. A judge has discretion to decline to make a contempt finding where the three-part test has been met where it would be unjust to do so, such as where the alleged contemnor has acted in good faith to take reasonable steps to comply with the relevant court order: Carey v. Laiken, at para. 37.
Analysis and Disposition
[17] I am satisfied beyond a reasonable doubt that the order clearly and unequivocally stated what was required to be done. It was never indicated by Mr. Zanette at any of his court appearances that he did not understand what was to be done.
[18] I am also satisfied beyond a reasonable doubt that Mr. Zanette had actual knowledge of the order. He has appeared in response to this motion on many occasions. My endorsement on March 24, 2022, over one year ago, warned him of the consequences of being found in contempt of a court order. By his representations made in court as to steps he had taken to obtain some of the information, it was clear that Mr. Zanette knew what he had to do but did not do so within the 30 days required. Indeed, although disputed by counsel for CLE, Mr. Zanette represented that he had dropped off a package of cancelled cheques last week, almost one-and one-half years after the original order.
[19] About a year after the production order was made, the contempt motion was adjourned to allow Mr. Zanette to “purge his alleged contempt”.
[20] I am, therefore, satisfied beyond a reasonable doubt that Mr. Zanette intentionally failed to act promptly in obtaining the required documents. Mr. Zanette may have, as of last week, attempted to provide the cancelled cheques but there is no information before me to indicate that he has made any efforts to document all payments to the shareholders, directors and officers or secure other insurance documents.
[21] Accordingly, I find Sportsdome and Mr. Zanette, as director and officer (president), in contempt of the order dated January 20, 2022.
[22] As the draft order filed by counsel for CLE sets out, Sportsdome and Mr. Zanette shall have 30 days to purge their contempt, failing which CLE may move to the penalty phase on notice.
[23] Sportsdome and Mr. Zanette are jointly and severally liable for the costs of CLE on this motion on a substantial indemnity basis which I fix in the amount of $14,482.35. Substantial indemnity costs are warranted because none of these attendances would have been required had the order been complied with. Litigants need to understand that there are consequences for failing to comply with court orders forthwith. Those consequences include indemnifying a party opposite for steps they have to take to enforce compliance with court orders.
“Original signed by” The Hon. Mr. Justice W.D. Newton